In a significant development, the Supreme Court of India has directed the Securities and Exchange Board of India (SEBI) to initiate an investigation into the allegations made by Hindenburg Research against the Adani Group. The Hindenburg Report accuses the Adani Group of engaging in various financial improprieties, including "brazen stock manipulations," "accounting fraud," and the utilization of a complex network of shell companies to facilitate financial transactions.
On August 26, 2023, SEBI submitted its status report to the Supreme Court, revealing that it is currently awaiting responses from five tax havens regarding the true ownership of foreign investors involved in Adani Group's affairs. The investigation centers around potential violations of Rule 19A of the Securities Contracts (Regulation) Rules, 1957, encompassing issues related to non-disclosure of party-related agreements and allegations of stock price manipulation.
Rule 19A mandates that Indian stock market-listed companies must maintain a minimum of 25% public stockholding. It's important to note that "public" in this context refers to individuals who are not connected to the company's promoters, relatives, subsidiaries, or associates.
A recent report from The Organised Crime and Corruption Reporting Project has shed light on substantial investments by Mauritius-based funds in Adani Group companies between 2013 and 2018. These funds are believed to have originated from investors in the United Arab Emirates and Taiwan, with the funds routed through a Bermuda-based fund. There are suggestions that these entities may have been used by Vinod Adani, the brother of Gautam Adani, to invest in Adani Group stocks.
Concerns have also emerged regarding the investigative process employed by SEBI in the Adani Group case. Some parties have raised questions about whether SEBI may have suppressed crucial facts or provided inaccurate information. Doubts have been expressed regarding SEBI's findings regarding stock price manipulation and insider trading in Adani Group stocks. In contrast to SEBI's report, an Expert Committee discovered multiple alerts related to Adani's securities, further intensifying concerns.
Since the release of the report by the Organised Crime and Corruption Reporting Project, Adani Enterprises' shares have seen a decline of 5.1%. The Adani Group has vehemently rejected these allegations, branding them as "mischievous and malicious."
It is anticipated that further investigation and a comprehensive forensic audit of Adani Group companies and the suspected Foreign Portfolio Investors will be instrumental in uncovering potential economic irregularities and verifying the credibility of these reports. The nation watches closely as this investigation unfolds.
Share This Post On
0 comments
Leave a comment
You need to login to leave a comment. Log-in
